Correlation Between Ardor and Bitcoin SV

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Can any of the company-specific risk be diversified away by investing in both Ardor and Bitcoin SV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ardor and Bitcoin SV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardor and Bitcoin SV, you can compare the effects of market volatilities on Ardor and Bitcoin SV and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ardor with a short position of Bitcoin SV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardor and Bitcoin SV.

Diversification Opportunities for Ardor and Bitcoin SV

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Ardor and Bitcoin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ardor and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV and Ardor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ardor are associated (or correlated) with Bitcoin SV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin SV has no effect on the direction of Ardor i.e., Ardor and Bitcoin SV go up and down completely randomly.

Pair Corralation between Ardor and Bitcoin SV

Assuming the 90 days trading horizon Ardor is expected to generate 1.25 times more return on investment than Bitcoin SV. However, Ardor is 1.25 times more volatile than Bitcoin SV. It trades about -0.07 of its potential returns per unit of risk. Bitcoin SV is currently generating about -0.1 per unit of risk. If you would invest  32.00  in Ardor on April 6, 2022 and sell it today you would lose (22.00)  from holding Ardor or give up 68.75% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ardor  vs.  Bitcoin SV

 Performance (%) 
      Timeline 
Ardor 
Ardor Performance
0 of 100
Over the last 90 days Ardor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Ardor investors.

Ardor Price Channel

Bitcoin SV 
Bitcoin Performance
0 of 100
Over the last 90 days Bitcoin SV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Bitcoin SV investors.

Bitcoin Price Channel

Ardor and Bitcoin SV Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ardor and Bitcoin SV

The main advantage of trading using opposite Ardor and Bitcoin SV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardor position performs unexpectedly, Bitcoin SV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bitcoin SV will offset losses from the drop in Bitcoin SV's long position.
The idea behind Ardor and Bitcoin SV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Bitcoin SV

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Bitcoin SV as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Bitcoin SV's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Bitcoin SV's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Bitcoin SV.
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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